If you are resident in Italy for tax purposes and own a property in the Netherlands, you owe IVIE, the Italian tax on the value of real estate held abroad. The most frequent error is to calculate it on the purchase price. For properties in EU and EEA countries the Italian rules point to the foreign cadastral value, and for the Netherlands that is the WOZ value, the figure on which the municipality calculates OZB.
On a property bought for € 160,000 and now valued at € 440,000 for WOZ purposes, the difference between the two bases is, for each of two equal co-owners, roughly € 1,500 of IVIE a year.
Who owes IVIE and for how much of the year
IVIE applies to individuals resident in Italy who own a property abroad or hold another real right over it (art. 19, paras. 13 and 14, D.L. 201/2011). The tax is proportional to the ownership share and to the months of ownership. A month counts in full if the right lasted at least 15 days in it.
The rate shown in the instructions to the Redditi PF 2026 return (Fascicolo 2, RW, column 31) is 1.06%. A property used as a main residence is not subject to IVIE, unless it falls in the Italian-equivalent cadastral categories A/1, A/8 or A/9.
The tax base: WOZ value, not purchase price
For properties located in an EU or EEA country that exchanges information with Italy, the value is the cadastral value determined in the country where the property is located for its own property or income taxes. The purchase cost applies only if no such value exists (art. 19, para. 15, D.L. 201/2011).
Circular no. 28/E of 2012 (section 1.2.1) defines that value as the one “taken as the basis for the taxes due there”. Its Table 1 lists, for the Netherlands, the onroerendzaakbelasting (OZB) as the reference tax. The WOZ value is the municipal valuation on which OZB is levied, so it is the value to use.
Two points from the circular are worth knowing. Table 1 was prepared by the Italian Revenue Agency without checking with the foreign authorities, and a taxpayer who identifies a different value under foreign law may use it and document it if audited. Second, in the RW section the value is reported with criterion code 5 (cadastral value) in column 6.
Operating note. The instructions to the return require the same valuation criteria for RW reporting even where no IVIE is due.
Which year’s WOZ value
The Italian instructions do not say which WOZ year applies to which Italian tax year. A Dutch WOZ notice issued in a given year carries a valuation date of 1 January of the previous year.
The approach we follow is to use the value that the municipality applies for OZB in the tax year concerned, as shown on that year’s OZB assessment. It keeps the IVIE base aligned with the foreign tax that the Italian rules take as reference. It is a working criterion, not a rule stated in the Italian instructions.
Worked example
Two spouses each own 50% of an apartment bought for € 160,000. The WOZ value for the year is € 440,000. Figures are illustrative.
| On WOZ value | On purchase price | |
|---|---|---|
| Value | € 440,000 | € 160,000 |
| Share per owner (50%) | € 220,000 | € 80,000 |
| IVIE at 1.06%, full year | € 2,332 | € 848 |
The difference is € 1,484 per owner for one year, before any credit.
The OZB credit
IVIE is reduced by a credit for foreign property taxes (art. 19, para. 16, D.L. 201/2011). For EU and EEA countries the credit also covers income and property taxes on the same property that were not already used as a foreign tax credit under art. 165 TUIR.
The circular (sections 1.3.1 and 1.3.2, and Table 1, column 3) lists OZB as a creditable tax for the Netherlands. The conditions that follow from the circular are these:
- the tax must have been paid in the reference year;
- the credit cannot exceed the IVIE due;
- taxes charged for the use of the property as a dwelling are excluded, so only the owner’s part of OZB qualifies, not the part charged to the user.
In the return the credit goes in column 12 of RW. The IVIE due in column 32 equals the IVIE calculated in column 31, less the credit in column 12 and less any main-residence deduction in column 13.
The guidance does not say how to split the credit when the OZB assessment is addressed to only one of the co-owners. We allocate it by ownership share and keep the assessment and payment evidence on file.
Continuing the example: if the owner’s part of OZB paid in the year is € 250, each co-owner credits € 125. The IVIE due per owner is € 2,332 − € 125 = € 2,207.
What goes in the return
The property is reported in the RW section of the Redditi PF return. The main entries are:
- column 1: code 1 (ownership);
- column 4: country code for the Netherlands;
- column 5: ownership share;
- column 6: code 5 (cadastral value);
- column 8: value at the end of the tax year;
- column 11: months of ownership.
If the property is no longer held at 31 December, the value is the one at the end of the holding period (circular 28/E, section 1.2).
Operating note. For a foreign property with no changes during the tax year, the instructions state that no indication in the return is required, while IVIE payments remain due (art. 7-quater, para. 23, D.L. 193/2016). If any change occurs, such as a purchase, a sale or a change of title, the RW section must list all foreign properties, including unchanged ones, so that IVIE is computed correctly.
Documents to keep
- the purchase deed, with the price;
- the WOZ notice for each year, showing the valuation date;
- the OZB assessment, showing the owner’s and the user’s parts, and proof of payment with its date;
- evidence of ownership shares;
- the deed and dates of any purchase or sale during the year;
- the IVIE calculation worksheet.
Frequent mistakes
- Calculating IVIE on the purchase price when a WOZ value exists.
- Crediting the whole OZB bill, including the part charged to the user.
- Mixing the year of the assessment with the year of payment.
- Applying a credit larger than the IVIE due.
- Ignoring the months of ownership in the year of purchase or sale.
Frequently asked questions
Do I owe IVIE on a Dutch property if I live in Italy? Yes, if you are resident in Italy for tax purposes and own the property or hold another real right over it. A main residence is outside IVIE unless it falls in the A/1, A/8 or A/9-equivalent categories.
Can I use the purchase price instead of the WOZ value? Only if no cadastral value exists. For EU and EEA properties the foreign cadastral value takes priority (art. 19, para. 15, D.L. 201/2011; circular 28/E/2012).
Does OZB reduce IVIE? Yes, as a tax credit, within the limit of the IVIE due. It must have been paid in the reference year, and only the owner’s part counts.
What if I sold the property during the year? IVIE is due for the months of ownership. The value to report is the one at the end of the holding period, and the property goes in the RW section because a change occurred.
Assistance
Studio Bonaccorsi assists entrepreneurs, professionals with a VAT number and companies with Italian and cross-border tax matters, including the IVIE calculation and the reporting of foreign property. It does not assist employees without a VAT number or a business activity.
This article gives general information and is not individual tax advice. Valuation basis, rate and credits depend on the tax year and on the facts of each case.
References: art. 19, paras. 13-16, D.L. 201/2011; Revenue Agency circular no. 28/E of 2 July 2012, sections 1.2, 1.3 and Table 1; instructions to the Redditi PF 2026 return, Fascicolo 2, RW section (columns 6, 11, 12, 31 and 32); art. 7-quater, para. 23, D.L. 193/2016; art. 165 TUIR.